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Mexico can produce lettuce domestically, but lettuce can also be imported from o

ID: 1230110 • Letter: M

Question

Mexico can produce lettuce domestically, but lettuce can also be imported from other nations. If Mexico imports some lettuce from other nations, it must be the case that:
Answer
A.Mexico has the comparative advantage in lettuce production compared to other nations that produce lettuce.
B.the world price of lettuce is lower than the domestic price of lettuce.
C.the price of lettuce in Mexico will rise to equal the world price of lettuce.
D.the domestic quantity of lettuce supplied will increase as more lettuce is imported from other nations.

Explanation / Answer

Look at figure the domestic market digital camara total surplus before international trade is equal to the area